Today's News
Flight delays and cancellations continue to sweep through the airline industry after major technical outages across the globe were triggered by a “glitch” in an update from cybersecurity firm CrowdStrike (CRWD, Financial), impacting Microsoft (MSFT, Financial) operating systems. The issue, which crippled flight systems, has been resolved, but the fallout still reverberates. At around 2:00am ET, Delta Air Lines (DAL, Financial), United Airlines Holdings (UAL, Financial), and American Airlines Group (AAL, Financial) requested a global ground stop from the Federal Aviation Administration, snarling travel at the nation’s airports and leading to delays and cancellations globally. As of 5am ET, American Airlines (AAL) had re-established operations, while Delta (DAL) and United (UAL) were issuing travel waivers to passengers impacted by the delays. The stock prices for the major airlines are mixed, with the legacy carriers unchanged to slightly higher.
The global outage that took down computers all over the world and interrupted air travel is a "major black eye" for cybersecurity firm CrowdStrike (CRWD, Financial), according to Wedbush Securities. In turn, it could lead to an opportunity for competitors to take advantage, the research firm added. CrowdStrike shares were down 10% in premarket trading on Friday after the company said a fix was being deployed. "This is clearly a major black eye for CrowdStrike and the stock will be under pressure after this global outage related to Microsoft has caused massive disruption globally," analyst Dan Ives wrote in an investor note. CrowdStrike has a strong brand and global marketing presence which will need to go into next gear over the coming weeks and months to curtail some damage from this.
This week's dividend activity included increased payouts from Goldman Sachs (GS, Financial) and Duke Energy (DUK, Financial) as well as declarations from companies like Johnson & Johnson (JNJ, Financial) and Qualcomm (QCOM, Financial). Additionally, looking towards next week, industry players like Caterpillar (CAT, Financial) and Pfizer (PFE, Financial) will see the ex-dividend dates for their upcoming dividend payments. Notably, Duke Energy (DUK) declared a new dividend amount of $1.045, up from $1.025, marking a 2% increase. Goldman Sachs (GS) also announced a new dividend amount of $3.00, up from $2.75, reflecting a 9.1% increase.
Following a rotation seen earlier in the week, U.S. stock futures were under some mild pressure in premarket trade on Friday. Biggest stock gainers included Hawaiian Electric (HE, Financial), which soared 38% following a Bloomberg report that stated the utility was among the companies that had tentatively agreed to pay more than $4B to resolve hundreds of lawsuits over last year's Maui wildfires. On the flip side, a major worldwide tech outage from CrowdStrike (CRWD, Financial) saw the stock drop 13% in early trading. Plug Power (PLUG) also fell nearly 10% after announcing the commencement of a $200M public offering of its common stock.
American Express (AXP) boosted its 2024 earnings guidance to reflect a gain from the sale of Accertify, but kept its revenue outlook unchanged. Q2 earnings beat the Wall Street consensus, but revenue fell short, as the pace of consumer spending slowed. The credit card lender and network raised its guidance for 2024 EPS to $13.30-$13.80 from its prior range of $12.65-$13.15 (vs. $12.92 consensus). During Q2, American Express (AXP) recorded a transaction gain of $3.49 per share from the sale of Accertify.
GE Aerospace (GE) unveiled plans Friday to spend more than $1B over five years to expand its maintenance, repair and overhaul facilities worldwide, in an effort to support customer fleets by increasing capacity and improving turnaround times. GE Aerospace (GE) said the funding will create capacity to meet growth in both the widebody and narrowbody installed base by adding additional engine test cells and equipment. Limited capacity at maintenance, repair and overhaul facilities has become a major constraint for the global airline industry.
Otis Worldwide (OTIS) said it has appointed Cristina Méndez as CFO and executive vice president. Effective August 23, Méndez, who is currently the senior vice president, finance EMEA & transformation, will succeed Anurag Maheshwari. Méndez had joined the company in 2022.
Halliburton (HAL) reported Q2 Non-GAAP EPS of $0.80 in-line with expectations. Revenue of $5.83B, however, missed by $120M. The company highlighted strong cash flow from operations of $1.1 billion and free cash flow of approximately $800 million. Halliburton also repurchased approximately $250 million of common stock during the quarter.
UBS has boosted its year-end price target for S&P 500 (SP500) to 5,900 and June 2025 target to 6,200 based on higher estimated EPS, amid healthy economic growth and surging investment in artificial intelligence. UBS argues that the market backdrop remains favorable due to a combination of factors including broadening profit growth, disinflation, a Federal Reserve pivoting to rate cuts, and surging investment in AI infrastructure and applications.
GuruFocus Stock Analysis
- Why American Tower Is a Strong Buy After 3-Year Decline by Hoang Quoc Anh
- Digging Into Mohnish Pabrai's Coal Portfolio by Horse Poor Investor
- Nvidia: Riding the AI Gold Rush to Unprecedented Heights by Lucas Wong
- Disney Is Set to Unlock Significant Shareholder Value by Kenio Fontes
